Caltex announces 2018 full-year results and buyback

Caltex has announced its financial results for the 12 months ending December 31, 2018.

The company says its RCOP (replacement cost of sales operating profit) NPAT (net profit after tax) result of $558 million is “above guidance provided in December 2018”.

It also announced an off-market buyback of about $260 million, which it expects to complete in 2Q 2019.

Managing Director and CEO Julian Segal said: “In 2018, we made significant progress executing the fuels and infrastructure and convenience retail strategies, setting the company up for long-term success.

“Fuels and infrastructure again performed strongly. Leveraging our integrated supply chain, Caltex delivered solid growth in Australian wholesale volumes and strong growth in our international business.

“Our convenience retail team has made great progress in the transition of franchise sites to company operations and developing our convenience offer. This includes our strategic partnership with Woolworths.

“Our 2018 financial results and the $260 million off-market buyback demonstrate our progress on transforming our business, our commitment to growth and our continuing focus on delivering returns to shareholders.”

Result highlights

  • Full-year RCOP NPAT of $558 million, above the guidance range of $533-553 million on December 18, 2018. Return on capital employed of 19 per cent.
  • The RCOP NPAT of $558 million included: the impact from $128 million lower refiner margin; $35 million lower earnings from the Woolworths fuel supply renegotiation; and about $20 million of impacts from transition of sites to company operations.
  • Fuels and infrastructure total earnings before interest and taxes (EBIT) of $570 million was in line with the guidance range of $560-580 million. Fuels and infrastructure (ex-Lytton) delivered a “very strong result”, with EBIT up 21 per cent on the year before. This was underpinned by higher Australian and international fuel-sales volumes. Total fuel sales increased by seven per cent to 20.4BL, with international fuel sales volumes up by 39 per cent to 3.5BL.
  • The Lytton refinery EBIT of $161 million was down $167 million compared with 2017. This was due to lower refiner margins and a $20 million impact of a previously announced refinery outage.
  • Convenience retail EBIT of $307 million was above the guidance range of $295-305 million.
  • Caltex says it has made “excellent progress” in the transition of stores to company operations. It now operates 516 stores, compared with 316 at the beginning of the year. Convenience retail EBIT was eight per cent lower than the year before, including about a $20 million impact from the ongoing transition of stores to company operations.
  • Final declared dividend of 61 cents per share (fully franked), representing a 61 per cent payout ratio for the half year and a 55 per cent payout ratio for the full year.
  • Off-market buyback of about $260 million, which Caltex expects to complete in 2Q 2019.

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